Fomento Economico Mexicano (FMX) AI Stock Analysis

• Market Cap: $19.67B
• Dividend Yield: 4.62%
• Average Volume (3M): 605.02K
• Price to Earnings (P/E): 35.0
• Beta (1Y): 0.42
• Revenue Growth: -2.73%
• EPS Growth: -37.93%
• Country: US
• Employees: 394,010
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Beverages - Alcoholic
• EPS (TTM): 0.38
• Shares Outstanding: 214,845,300
• 10 Day Avg. Volume: 404,292
• 30 Day Avg. Volume: 605,019
• PEG Ratio: -1.06
• Price to Book (P/B): 2.08
• Price to Sales (P/S): 0.79
• P/FCF Ratio: 25.59
• Enterprise Value/Market Cap: 2.34
• Enterprise Value/Revenue: 0.06
• Enterprise Value/Gross Profit: 0.14
• Enterprise Value/Ebitda: 0.54
• 1Y Price Target: $105.43
• Price Target Upside: 10.11% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 71 Outperform
• Price Target: $105.00 ▲(9.66% Upside)

Fomento Economico Mexicano's overall stock score reflects a stable financial performance with strong revenue growth but challenges in profitability and leverage. The technical analysis indicates a bullish trend, while valuation concerns are mitigated by a strong dividend yield. The earnings call provided mixed signals with growth in digital and retail initiatives but significant declines in net income. The absence of notable corporate events keeps the focus on financial and operational performance.

Fomento Economico Mexicano Business Overview & Revenue Model

Company Description

Fomento Economico Mexicano (FMX) is a leading Mexican multinational company primarily engaged in the beverage, retail, and food sectors. Known for its significant presence in the soft drink and bottled water markets, FMX operates various production and distribution facilities across Mexico and other countries. The company also has a retail division that includes convenience stores and restaurants, providing a diverse portfolio of products and services that cater to a wide range of consumer needs.

How the Company Makes Money

FMX generates revenue through multiple key streams, with its primary source being the production and sale of beverages, including soft drinks and bottled water. The company benefits from high-volume sales and economies of scale in its manufacturing processes. Additionally, FMX's retail operations, which encompass convenience stores and dining establishments, contribute significantly to its earnings through direct sales to consumers. Strategic partnerships with major brands and suppliers enhance its market presence and product offerings. Furthermore, FMX capitalizes on market expansion opportunities in international markets, allowing for diversified revenue generation. Overall, the combination of its beverage manufacturing and retail operations, along with strong brand partnerships, forms the backbone of FMX's revenue model.

Fomento Economico Mexicano Financial Statement Overview

Summary

Fomento Economico Mexicano exhibits strong revenue growth and solid profitability metrics, supported by effective cost management. The balance sheet shows stable leverage, with a healthy equity base. Cash flow generation is strong, although Free Cash Flow has seen a decline recently. Overall, the company is in a stable financial position with good growth potential, although careful management of leverage and cash flow is advisable.

Income Statement

The company shows strong revenue growth with a 16.95% increase from 2023 to the TTM period. Gross Profit Margin remains solid at 41.47% for TTM, reflecting efficient cost management. Net Profit Margin improved to 4.41% in TTM, indicating enhanced profitability. EBIT and EBITDA Margins are healthy at 8.87% and 11.01% respectively, showing stable operational performance.

Balance Sheet

The balance sheet indicates a stable equity ratio of 36.00% in TTM, suggesting good asset leverage. The Debt-to-Equity Ratio is 0.85, reflecting manageable debt levels. Return on Equity is moderate at 11.45%, showing decent returns for shareholders. The financial position is stable but slightly leveraged.

Cash Flow

The cash flow performance is robust, with a Free Cash Flow growth rate of -31.84% from 2023 to TTM. The Operating Cash Flow to Net Income Ratio is strong at 1.81, indicating efficient cash generation. The Free Cash Flow to Net Income Ratio is 0.47, which is satisfactory but indicates room for improvement.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	812.67B	781.59B	702.69B	597.01B	556.26B	492.97B
Gross Profit	335.36B	321.51B	279.51B	241.52B	206.18B	189.65B
EBITDA	84.66B	123.43B	109.03B	91.49B	69.95B	54.70B
Net Income	16.14B	26.73B	65.69B	23.91B	28.50B	-1.93B
Balance Sheet
Total Assets	831.04B	851.54B	805.86B	798.62B	737.50B	684.64B
Cash, Cash Equivalents and Short-Term Investments	162.31B	183.05B	191.84B	83.49B	121.82B	107.89B
Total Debt	265.48B	256.30B	232.90B	285.06B	252.94B	246.97B
Total Liabilities	505.99B	470.40B	427.49B	459.96B	402.68B	377.45B
Stockholders Equity	241.42B	297.50B	303.86B	338.66B	334.82B	307.19B
Cash Flow
Free Cash Flow	18.60B	24.20B	11.56B	40.14B	52.79B	33.03B
Operating Cash Flow	62.66B	71.51B	49.68B	72.58B	73.09B	53.17B
Investing Cash Flow	2.24B	-33.12B	132.29B	-46.43B	-46.17B	-31.37B
Financing Cash Flow	-68.53B	-84.05B	-92.55B	-35.90B	-36.99B	19.57B

Fomento Economico Mexicano Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 95.75
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FMX, the sentiment is Positive. The current price of 95.75 is above the 20-day moving average (MA) of 94.03, above the 50-day MA of 90.74, and above the 200-day MA of 92.41, indicating a bullish trend. The MACD of 1.08 indicates Negative momentum. The RSI at 56.36 is Neutral, neither overbought nor oversold. The STOCH value of 77.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FMX.

Fomento Economico Mexicano Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ABEV	―	$35.50B	13.36	15.08%	2.04%	-0.79%	-10.83%
BUD	―	$122.04B	17.02	8.97%	1.70%	-2.06%	21.03%
FMX	―	$19.67B	35.03	6.88%	4.62%	-2.73%	-37.93%
CCU	―	$2.29B	14.60	10.15%	3.48%	13.92%	32.69%
TAP	―	$9.00B	8.95	7.79%	4.09%	-5.48%	-6.99%
Sector *	―	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
STZ	―	$24.44B	20.38	15.91%	2.94%	-5.57%	119.49%

Fomento Economico Mexicano Corporate Events

FEMSA Reports Strong Revenue Growth in First Half of 2025

Fomento Económico Mexicano, S.A.B. de C.V. (FEMSA) reported its financial results for the first half of 2025, showing an increase in total revenues to U.S. $21,606 million compared to the same period in 2024. The company experienced growth in gross profit and managed to maintain steady operations despite challenges such as fluctuating raw material prices and changes in economic conditions. These results reflect FEMSA’s resilience and strategic positioning in the market, which could have positive implications for its stakeholders.

FEMSA Announces New CEO Appointment Effective November 2025

On September 17, 2025, FEMSA announced a leadership transition, appointing Jose Antonio Fernández Garza-Lagüera as the new CEO, effective November 1, 2025. This decision follows a comprehensive succession planning process led by FEMSA’s Board of Directors and a Special Committee. José Antonio Fernández Carbajal, who served as interim CEO since July 2023, will continue as Executive Chairman. The transition is expected to guide FEMSA into a new phase of growth and innovation, emphasizing economic and social value creation.

FEMSA to Fully Control OXXO Stores in Brazil After Ending Joint Venture

On September 4, 2025, FEMSA announced the termination of its joint venture with Raízen, S.A. in Brazil, allowing FEMSA to take full control of OXXO stores in the country. This strategic move aligns with FEMSA’s focus on expanding its retail operations in Brazil, a market with significant growth potential due to its large size and fragmented retail landscape. The separation agreement, which is cash-neutral, will see FEMSA assume the existing debt of the joint venture and is expected to close in the coming months, pending regulatory approvals.

FEMSA Supports BradyPLUS and Imperial Dade Merger

On August 11, 2025, FEMSA announced that BradyPLUS and Imperial Dade have agreed to merge through an all-equity transaction, which FEMSA supports. BradyPLUS, in which FEMSA holds a minority stake, and Imperial Dade, both operating in the U.S. janitorial, sanitation, and packaging sectors, aim to expand their geographic reach and enhance customer service through this merger. FEMSA will maintain a 19% stake in the new entity and have board representation, with the merger pending regulatory approval and expected to close in the coming months.

FEMSA Reports Mixed Q2 2025 Results Amidst Challenging Conditions

Fomento Económico Mexicano (FEMSA) reported its financial results for the second quarter of 2025, showing a 6.3% increase in total consolidated revenues and a 1.2% rise in income from operations compared to the same period in 2024. Despite challenges in Mexico due to a soft consumer environment and adverse weather, the company saw strong performance in its international operations, particularly in South America, aided by favorable currency conditions. The retail and beverage sectors outside Mexico showed promising growth, with initiatives in place to reverse traffic and volume trends and manage costs effectively in the second half of the year.